6/16/17

The two oldest, biggest chemical companies in the country can now live happily ever after together (minus a few products), as federal antitrust regulators have given the green light to this $130 billion mega-merger.

The Department of Justice announced Thursday the approval of the DuPont and Dow merger under the condition the companies divest multiple crop protection and two petrochemical products.

According to a civil antitrust lawsuit and settlement [PDF] filed Thursday by the DOJ’s Antitrust Division, along with the state attorneys general from Iowa, Mississippi, and Montana, the proposed divestitures would prevent price hikes and lost innovation.

Although neither business distributes goods directly to consumers under their main brand names, between them the two have their hands in, well, pretty much everything. In short, these are the companies that make all the things that make all the other things possible.

For instance, Dow makes plastics of every type and a wide range of chemicals, used for everything from pesticides to paint, while DuPont dabbles in inventing materials like Lycra and Tyvek, and focusing on agriculture, including genetically modified crops; biofuels and increased-efficiency products; and continuing their “advanced materials” research.

Dow and DuPont, of course, spun their significant overlap in business, particularly in the agricultural sphere, as “synergy,” while regulators were more keen to think of that duplication as “competition.”

The regulators say that without making divestitures, the proposed merger likely would reduce competition between two of only a handful of chemical companies that manufacture certain types of crop protection chemicals and the only two U.S. producers of acid copolymers and ionomers, potentially harming U.S. farmers and consumers.

Under the settlement, DuPont will sell its Finesse herbicide and Rynaxypyr insecticides. The DOJ claims that these two products alone have U.S. sales of over $100 million, and their sale would preserve competition in U.S. markets for broadleaf herbicides for winter wheat and insecticides for chewing pests.

Additionally, Dow will be required to sell its U.S. acid copolymers and ionomers business, used to make food packaging and other goods.

Reuters reports that the U.S. antitrust settlement mirrors one European regulators proposed in March, paving the way for the Dow-DuPont merger across the Atlantic.

“The remedies obtained by today’s settlement… will preserve vigorous competition in the sale of these products and benefit American farmers and consumers alike,” Acting Assistant Attorney General Andrew Finch of the Justice Department’s Antitrust Division said in a statement.

DuPont and Dow first revealed their romantic relationship back in Dec. 2015.

The companies said at the time that they would take what was once two companies, make it one, and then split it up again into three separate, publicly-traded entities. One DowDuPont business would focus entirely on agriculture, another on materials science (which includes infrastructure, consumer goods, and inventing stuff like Teflon), and the last (and smallest) on “specialty products,” which is basically everything that doesn’t fit in one of the other two.